Fitch Downgrades Two Distressed Classes of Bear Stearns 2006-TOP 22

August 21, 2014 02:28 PM Eastern Daylight Time

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has downgraded two classes of Bear Stearns Commercial
Mortgage Securities Trust (BSCMST), series 2006-TOP22 commercial
mortgage pass-through certificates. A detailed list of rating actions
follows at the end of this release.

KEY RATING DRIVERS

The downgrades of BSCMST, Series 2006-TOP22 are based on the increase in
realized losses due to specially serviced loan liquidations since the
last annual review. The pool's aggregate principal balance has been
reduced by 33.5% to $1.133 billion from $1.705 billion at issuance.
Fitch modeled losses of 4.41% of the remaining pool; expected losses on
the original pool balance are 4.1%, which includes 1.17% in realized
losses to date. Fitch designated 28 loans (15.2%) as Fitch Loans of
Concern, which include three specially serviced loans (1.7%).

The largest contributor to Fitch's modeled losses is Rolling Meadows
Shopping Center (1.5% of the pool), a 130,436 square foot (sf) anchored
retail center located in Rolling Meadows, IL. The subject was built in
1956 and renovated in 1990. The property is located 28 miles northwest
of the Chicago central business district in the suburban submarket of
Arlington Heights. The center has experienced performance issues for the
past year due to increased expenses and decreased occupancy. Although
the sponsor has increased occupancy to 89%, from a 2012 low of 80%, the
center is still below the issuance high of 98%. Near-term performance of
the asset will be driven by the sponsor's ability to renew anchor
tenants during the next 18 months at market rates.

The second largest contributor to Fitch's modeled losses is the
specially serviced Gateway Business Center (0.83%), an 117,500 sf
suburban office building located in Melbourne, FL. The occupancy rate at
the subject is 69% with a large amount of tenants and net rental area
scheduled to expire in the next 18 months. The special servicer
completed a review of the property and is proceeding with judicial
foreclosure proceedings. The motion to appoint a receiver was filed in
early June and special servicer is awaiting a judgment as it pursues its
legal remedies.

The third largest contributor to Fitch's modeled losses is Lake Buena
Vista Courtyard by Marriott (1.2%), a 308-room full-service,
Marriott-flagged hotel, located in Orlando, FL. The resort faces strong
competition from the large number of properties in the sub-market which
cater exclusively to the same customer segment. Performance has started
to recover with the resurgence of activity at Walt Disney World and
Universal Studio. Occupancy rose to 71% during the first half of 2014,
which is just below the 72% that was last reached at issuance.

RATINGS SENSITIVITY

The Rating Outlook remains Negative for the D and E classes. These
classes could experience negative ratings migration if the transaction
experiences an increase in the number of specially serviced loans or
expected losses increase.

Fitch downgrades the following classes as indicated:

--$2.1 million class K to 'Csf' from 'CCsf'; RE0%;

--$2.9 million class L to 'Dsf' from 'Csf'; RE0%.

Fitch affirms the following classes as indicated:

--$542.3 million class A-4 at 'AAAsf'; Outlook Stable;

--$155.5.1 million class A-1A at 'AAAsf'; Outlook Stable;

--$170.5 million class A-M at 'AAAsf'; Outlook Stable;

--$125.7 million class A-J at 'AAsf'; Outlook Stable;

--$32 million class B at 'Asf'; Outlook Stable;

--$12.8 million class C at 'BBBsf'; Outlook Stable;

--$25.6 million class D at 'BBsf'; Outlook Negative;

--$14.9 million class E at 'Bsf'; Outlook Negative;

--$14.9 million class F to 'CCCsf'; RE 70%;

--$14.9 million class G at 'CCCsf'; RE0%;

--$8.5 million class H at 'CCsf'; RE0%;

--$10.7 million class J at 'CCsf'; RE0%;

--$0 million class M at 'Dsf'; RE0%;

--$0 million class N at 'Dsf'; RE0%;

--$0 million class O at 'Dsf'; RE0%;

Fitch does not rate the $0.0 million class P. Classes A-1, A-2, and A-3
and A-AB have repaid in full. Classes M through O and the unrated class
P have been reduced to zero due to losses realized on loans liquidated
from the trust. Fitch previously withdrew the rating on the
interest-only class X.

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